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Bitcoin Short Squeeze Incoming? Negative Funding, $80K Liquidations, and Gamma Could Ignite Breakout

Shorts are doubling down as bitcoin rises, pushing funding rates to extreme levels. A break above $80K could trigger cascading liquidations and dealer hedging, accelerating the move higher.

Bitcoin Short Squeeze Incoming? Negative Funding, $80K Liquidations, and Gamma Could Ignite Breakout

Bitcoin & Markets | Apr 22, 2026

Exploring the intersection of bitcoin, macroeconomics, markets, biology, and politics within the evolving global order.

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Funding Rates Signal Short Squeeze

The bears absolutely hate this rally.
I don't believe we have ever seen anything quite like it in Bitcoin history.

That was Checkmatey this morning on X. He was talking about funding rates, implying bitcoin is rallying yet bearish sentiment is increasing.

For those unfamiliar, funding rates are the periodic payments (typically every 8 hours) exchanged between longs and shorts in perpetual futures to keep price aligned with spot. The larger the rate, the greater the imbalance, and the more expensive it is to hold that side.

As you can see above, this is the most expensive shorting has been since the COVID crash in March 2020.

This could mean:

  1. Sentiment is really bad and people are making new bets against the breakout,
  2. People are adding money to underwater positions to avoid a margin call and liquidation.

I lean toward the latter. Not so much a “hated rally,” more like doubling down on existing positions.

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Liquidation Levels

There is a significant liquidation level just above the price at $79,650.

I had to switch data sources for this heatmap because Coinglass now requires an account. This chart from BitcoinCounterFlow.com is clean, but limited to Binance or ByBit. This is Binance.

Anyway, it confirms that shorts are facing a big liquidation level around $80k. Their getting squeezed tight. Could happen today, or at least, this week.

There isn't much on the chart until $98k. So, price should travel quickly. I still think bitcoin is going to surprise us when it happens.

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Options Market

A quick update on the options market. Disclaimer: I'm not an expert in options, but I follow several quants.

The overall positioning in the options market right now is bullish. On Deribit, there's 257k call contracts vs. 185k put contracts.

The Gamma regime is positive in the range of $75-80k. Meaning volatility is being dampened there. However, it flips negative or short above and below those levels, meaning pro-cyclical forces. $80,000 is highlighted as a major gamma wall. Breaking above it would force dealers to buy a lot of BTC to re-hedge.

End-of-month expiration is happening this Friday, with approximately $8 billion in contracts. Max pain is down at $71.5k.

In summary, there is a bullish bias in the options market with $80k being an important level moving into the end of the week. If price can close above that, there is a potential feedback loop with options gamma squeeze meeting a perps short squeeze.

HODL strong. Thanks for reading! PLEASE SHARE!

A

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